Browse never a good fit for BHP

BHP Billiton's decision to exit the high profile Browse LNG joint venture is a reminder that the proposed location for the giant gas processing plant is not only contentious among environmental and indigenous rights activists.

The controversy over James Price Point has done nothing to make the project more popular within BHP. Photo: Rob Homer

The prime site under investigation - James Price Point near Broome in WA - has long caused friction within the cluster of companies that are jointly developing the $30 billion project.

There has been persistent suggestions that some partners (BHP in particular) would like to save a few pennies by piping the gas south to the existing North West Shelf gas hub, while other partners (namely Shell) have been pushing their new floating LNG technology as an economic way to develop the gas without disturbing the dinosaur footprints that are dotted around the shoreline at James Price Point.

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In recent months, two of those original stakeholders have departed, with BHP today following the example set by Chevron in late August.

Officially, BHP's decision to divest was based on its core strategy of investing only in top-tier projects in which, preferably, BHP is the operator and biggest stakeholder.

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Browse did not satisfy any of those urges, and the $US1.63 billion ($A1.56 billion) recouped from the sale to PetroChina is handy cash for a company that is in cost-cutting mode.

Unofficially, the ruckus over the selection of James Price Point has not garnered any love for the project within BHP.

Chief executive Marius Kloppers made that clear at last month's AGM when he stressed that being forced to consider just one site for a project - as was the case with Browse thanks to the firm hand of state and federal governments - was far from ideal.

In comments that were about as blunt as Mr Kloppers ever gets, he indicated he would have been happier to have more options to study at Browse. "As an industrial company, more options is always more valuable," he said.

Then there is the sensitive matter of public perceptions: the Browse project hits just about every controversy button, from the dinosaur footprints, to indigenous rights issues, to whales to the industrialisation of a region strongly reliant on tourism.

Preventing development at James Price Point has become one of those rare environmental causes - like Tasmania's Pulp Mill - to be adopted by people across the nation.

If Mr Kloppers needed any reminder of that, seeing John Butler sing songs of protest outside his office in Melbourne would have been a stark reminder.

Public perceptions in Australia matter more to BHP than they do to PetroChina.

And so the operator of the project, Woodside Petroleum, ploughs on through evaluation work with an increasingly international set of joint venture partners.

Woodside itself recently sold down part of its stake to Japanese consortium Mitsubishi and Mitsui. Shell and BP round out the party. All of those companies have the right to match PetroChina's bid, and the deal is subject to regulatory approvals.

Woodside is expected complete studies in about seven months time when the consortium will be able to take a final investment decision.